A warranty is a guarantee from a manufacturer or seller that the products purchased will be free of defects for a certain period of time. In the context of M&As in technology warranties are frequently utilized to control security and data availability risk.

Security warranties for data are becoming more popular among distributors. With ransomware set to cost businesses $265 billion by 2031 and a move to attack every 2 seconds, it's not surprising that they provide this new assurance to their clients. These guarantees minimize the economic dangers of cyberattacks and breaches by transferring legal responsibility to the vendor, and are usually offered as a complement to cybersecurity insurance, which helps fill the gaps when insurance coverage might not be enough.

Security guarantees differ widely in terms of their specifics but generally include the loss of revenue for businesses as well as additional costs incurred and reputational damage that is caused by the breach. They may also include policies that is designed to cover legal responsibility which covers the expenses of letting the victims of an attack to be informed as well as any fines or charges received from lawsuits that could be filed.

While the concept behind a data safety warranty is sound, a lot of them have serious flaws. Take the example of Rubrik that offers a "Recovery Incident Warranty." This warranty pays for what they call "Recovery Incident Expenses." But this doesn't mean that your employees are getting paid for the hours spent on a recovery incident. In order for Rubrik to pay up they'll need receipts for these expenses which is a bit of a red flag.

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